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Now, just to bring anyone up to speed who hasn’t seen the first 3 videos in this renovation series:
-On December 11th, 2019, I posted a video of what this unit looked like once the tenant moved out. This place had been occupied for over 10 years, and the prior owner and landlord before me, pretty much did no work to this place whatsoever.
-Then….in the second update of this series, posted on December 20th…we started doing demo, and tearing the unit apart to see what’s behind the walls.
-And finally, the last video I posted on January 10th of last month…when the cost of this entire renovation exceeded $100,000.
Now - it turns out the electrical wiring needs to be replaced, and remodeling and replacing that is an extra $10,000.
Next, we had to replace the ceiling jousts because the old beams were 100 years old and sagging. And the only way to have a completely flat, smooth ceiling was to cut them out and then replace them.
We also had to level out all the floors since, over time, things have moved and shifted around a bit, and so far - we got that done by laying some board over top. But, the bad news is that the current hardwood floors are going to be difficult to salvage and keep everything level at the same time without spending a ridiculous amount of money - so, with that, we’re going to have to put new flooring over top of this.
Besides, that though…everything is really coming along nicely.
Plus, from a tax perspective - everything I spend here can be depreciated against my rental income, so that saves me money on future taxes. For all of you real estate people out there - who love saving money on taxes - here’s how it works.
You typically have 2 ways to save money on taxes by doing this - one is by taking the total cost of the renovation, and then dividing that by 27.5 - and that means, every year, you can depreciate that amount against your income.
OR - you have the option to do what’s called Cost Segregation Analysis - This is when you accelerate the depreciation for certain items, like floors, countertops, etc over a shorter period of time…like, if I spent $10,000 on floors - instead of depreciating that over 27.5 years, I might be able to depreciate it over 5 years, as an example - saving me even more money upfront.
So, in a way - even though I’m spending all of this money fixing it up, in order to get higher rent - I’m still able to use these costs as a write off, to save money on taxes, at the same time. So, at least that’s a pretty good reason to invest in real estate, fix it up, - and it helps offset some of the amount I’m spending to fix the place up.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.

By Stock Chat

where the coffee is hot and so is the chat

33 thoughts on “Everything wrong with my $100,000 remodel …”
  1. Avataaar/Circle Created with python_avatars Jason Rogers says:

    The only time you should over improve is if your refinancing

  2. Avataaar/Circle Created with python_avatars Ali Chehab says:

    Goes over budget.

    G: “well I better find a sponsor to make up the difference and some profits”

  3. Avataaar/Circle Created with python_avatars RightAway Insurance says:

    Why does he keep saying jousts when it’s joists ?

  4. Avataaar/Circle Created with python_avatars Warriors Garden says:

    Graham, testing fate: "What next? What could possibly go wrong"
    Covid: Allow me to introduce myself

  5. Avataaar/Circle Created with python_avatars Robert Smith says:

    Electrical can be very expensive. When I bought my house, I was scrapping the popcorn ceiling in the living room. I also was installing recessed lighting. After scrapping the popcorn ceiling, I noticed a patch of drywall on the ceiling. I opened up the drywall patch in the ceiling (hidden behind the popcorn material) and found electrical spicing without a box. Code requires all spices to be contained in a box which must be exposed and accessible. Needless to say, I ended up redoing the electrical due to many spices behind the drywall without being boxed.

  6. Avataaar/Circle Created with python_avatars Gavin says:

    modern

  7. Avataaar/Circle Created with python_avatars Kathleen Cirillo says:

    Modern shower please. Can't wait to see it all finished! Go go go!

  8. Avataaar/Circle Created with python_avatars Laurie Hunter says:

    I vote for new dual paned windows! Do it now while you already have tenants out and workers in. Better for electric bill too! I also vote for the glass walk in shower.

  9. Avataaar/Circle Created with python_avatars nicky cochran says:

    Love seeing the updates

  10. Avataaar/Circle Created with python_avatars Solomon Ganz says:

    Abt chance you can share estimated costs per main ticket items? e.g. Electric $10k, Floors $20k, Joists $15k? Just curious.

  11. Avataaar/Circle Created with python_avatars Ranting Ratite says:

    What more can go wrong?
    Oh literally the entire world is in disarray do to a pandemic? Who could of guessed?

  12. Avataaar/Circle Created with python_avatars Leyla says:

    the way Graham asks for a like always makes me smile and hit the like Button 😀

  13. Avataaar/Circle Created with python_avatars BoB Tubocass says:

    Those windows look like the least energy-efficient windows possible.

  14. Avataaar/Circle Created with python_avatars Obscured Travel says:

    Have you considered offering "exposure" as part of your payment for the contractors? See Louis Rossman

  15. Avataaar/Circle Created with python_avatars Tunes ForToons says:

    $3000 a month for that house? o.O WHAT

  16. Avataaar/Circle Created with python_avatars Liveordiebyinches says:

    Hahahahaha. "Best" to replace the knob and tube. They made u. Or no occupancy. Lol

  17. Avataaar/Circle Created with python_avatars Israel Torres says:

    Can you go further in depth on affording renovations for a first time buyer such as Home Improvement loans. Thanks!

  18. Avataaar/Circle Created with python_avatars Quick N Easy Handyman says:

    Is somebody going to tell him it's Ceiling "joists"

  19. Avataaar/Circle Created with python_avatars Jeff Stettler says:

    women like their tubs.. happy wife happy life.. for the renters
    new windows 🙂

  20. Avataaar/Circle Created with python_avatars Question Mark says:

    That clawfoot with glass is HIDEOUS!!!

  21. Avataaar/Circle Created with python_avatars area81 says:

    Show more of your housing projects!

  22. Avataaar/Circle Created with python_avatars DrNomad X says:

    on Hold ? miss the updates on this

  23. Avataaar/Circle Created with python_avatars Conner Baker says:

    Definitely clawfoot tub

  24. Avataaar/Circle Created with python_avatars Victor Damota says:

    I install windows and doors for a living and you definitely should of replace the windows. Tenant will appreciate it much more plus it will save them more money on there utility bill.

  25. Avataaar/Circle Created with python_avatars My Catty Ella says:

    Modern Shower

  26. Avataaar/Circle Created with python_avatars Jonathan G says:

    Wait a second, how is this guy into real estate if he doesnt even know how to pronounce joist? It's a really common word that people in real estate are familiar with, as contractors are always doing remodels and repairs and throwing these words around.

  27. Avataaar/Circle Created with python_avatars Irwin Graulich says:

    Graham–It will probably become the money pit!!! I had a bad feeling about it.

  28. Avataaar/Circle Created with python_avatars L Y says:

    Be sure that you're not writing off too much. If your earnings are too low, you won't have earned enough to receive your Social Security Retirement in the future.

  29. Avataaar/Circle Created with python_avatars Jamie Smallbone says:

    Check out @ThomasJamesPropertyInvesting review of Graham's remodel on his channel

  30. Avataaar/Circle Created with python_avatars Physicist Ben says:

    modern shower. I really like the new layout of the bathroom! definitely the best so far!

  31. Avataaar/Circle Created with python_avatars customexhaustshop says:

    Should have just taken off. Nuke the whole place from orbit. Only way too be sure.

  32. Avataaar/Circle Created with python_avatars Itsahor Mr. G says:

    Dont take the windows out either u belive it or not they ad value to the project or take them down carefully because their is a market for vintage windows, well most vintage house decor 👍🧐 just a thought

  33. Avataaar/Circle Created with python_avatars djinnz says:

    Modern shower makes sense… and please change those windows! 😀

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